Taking the first step to buying your new home means reaching out to your mortgage broker or lender to find out how much home you can qualify for.
A mortgage pre-approval means that your broker has sent your documents to a lender and the lender has verified said documents. Based on your credit score, income, assets and liabilities the lender has approved a specific loan amount. The pre-approval will include the present interest rate and will be good for 60-120 days depending on the lender. If you get lucky enough that the interest rate drops before your mortgage documents are signed, you will receive the lower rate.
Having a pre-approval before house shopping will save a lot of heartache. I’ve seen countless purchases fall apart because the buyer was not pre-approved.
Sellers don’t like to give more than 10 days for a financing condition on a home purchase, which means if you don’t want to let your purchase slip away, you’ll want your financing in order before making an offer.
Getting pre-approved takes time because each lender has their own criteria for approval. If you have to wait on CRA for your previous year’s tax returns or your employer to get you an income verification letter, the process can take weeks. Trust me, you don’t need the added stress of waiting to find out IF you’ll qualify after you’ve found the home of your dreams.
Lenders like to see a score of at least 680
The more money you make and assets you own, the better.
Lenders like for you to be at the same job for at least 24 months.
There are exceptions to this one. Speak to your mortgage broker to find out if you can qualify for an exception.
Your monthly costs vs your income.
To figure out how much you could qualify for, check out our mortgage affordability calculator.
Each lender will be different but usually you will need to provide:
Contact your broker or lender to discuss your specific situation. Your broker will request your documents and send them off with your file to a few lenders. Your broker will then present you with a pre-approval for a mortgage product that suits your needs at the best rate possible. The entire process can be done via email/phone to make it as easy as possible for you.
